CHAPTER 8

Computer Reservation Systems and Global Distribution Systems

Objective: This chapter deals with the existing reservation systems used by the hospitality industry. At the end of this chapter, the students should be able to identify and enumerate the different techniques and strategies on an online reservation and information systems.

Definition:

A computer reservation system (CRS) is a computerized system used to store and retrieve information and conduct transactions related to travel. Originally designed and operated by airlines, they were later extended to travel agents as a sales channel; major CRS operations that book and sell tickets for multiple airlines are known as Global Distribution System (GDS). Airlines have divested most of their direct holdings to dedicated Global Distribution System companies, and many systems are now accessible to consumers through Internet gateways for hotel, rental cars, and other services as well as airline tickets

GDS / CRS Evolution

The travel marketplace is a global arena where millions of buyers ( travel agents and public) and sellers (hotels, airlines, car rental companies, etc.) work together to exchange travel services. Among the “shelves” on which buyers search for travel services are world global distribution systems and the Internet distribution systems. These systems have become electronic supermarkets linking buyers to sellers and allowing reservations to be made quickly and easily. Nowadays, more travel is sold over the internet than any other consumer product. The Internet is a perfect medium for selling travel as it brings a vast network of suppliers and a widely dispersed customer pool together into a centralized market place. Nearly 37 million f America’s more than 162-million active internet users have already purchased travel online. Online travel bookings exceeded $23 billion in 2001, and are expected to reach $63 billion by 2005.

However, any discussion of the Internet as a distribution channel for travel needs to start with an understanding of the existing electronic distribution infrastructure, the Global Distribution System (GDS). The airline industry created the first GDS in the 1960s as a way to keep track of flight schedules, availability, and prices. Although accused of being “dinosaurs” due to their use of legacy system technology, GDS were actually among the first e-commerce companies in the world facilitating B2B electronic commerce as early as mid 1970s, when SABRE (owned by American Airline) and Apollo (United) began installing their propriety internal reservations systems travel agencies. Prior to this, travel agents spent inordinate amount of time manually entering reservations. The airlines realized that by automating the reservation process for travel agents, they could make the travel agents more productive and essentially turn into an extension of the airline’s sales force. It is this original legacy that GDS today provide the backbone of the internet travel distribution system.

There are currently four major GDS systems:

1. Amadeus
2. Galileo
3. Sabre
4. Worldspan

In addition, there are several smaller or regional GDSs, including SITA's Sahara, Infini (Japan), Axess (Japan), Tapas (Korea), Fantasia (South Pacific), and Abacus (Asia/Pacific) that serve interests or specific regions or countries.

I. Amadeus

Founded in 1987 by Air France, Iberia, Lufthansa, and SAS, Amadeus is the youngest of the four GDS companies. Amadeus is a leading global distribution system and technology provider serving the marketing, sales, and distribution needs of the world's travel and tourism industries. Its comprehensive data network and database, among the largest of their kind in Europe, serve more than 57,000 travel agency locations and more than 10,500 airline sales offices in some 200 markets worldwide. The system can also provide access to approximately 58,000 hotels and 50 car rental companies serving some 24,000 locations, as well as other provider groups, including ferry, rail, cruise, insurance, and tour operators.

2. Galileo International

Galileo International was founded in 1993 by 11 major North American and European airlines: Aer Lingus, Air Canada, Alitalia, Austrian Airlines, British Airways, KLM Royal Dutch Airlines, Olympic Airlines, Swissair, TAP Air Portugal, United Airlines, and US Airways. It is a major player in the GDS business throughout the world: North America, IEurope, the Middle East, Africa, and the Asia/Pacific region. Galileo International is a diversified, global technology leader. Its core business is providing electronic global distribution services for the travel industry through its computerized reservation systems, leading-edge products and innovative Internet-based solutions. Galileo is a value-added distributor of travel inventory dedicated to supporting its travel agency and corporate customers and, through them, expanding traveler choice.

3. Sabre

For more than 40 years, Sabre has been developing innovations and transforming the business of travel. From the original Sabre computer reservations system in the 1960s, to advanced airline yield management systems in the 1980s, to leading travel web sites today, Sabre technology has traveled through time, around the world, and has touched all points of the travel industry. In July of 1996, Sabre became a separate legal entity of AMR (parent company of American Airlines), followed by a successful initial public offering in October in which AMR released approximately 18% of its shares to be publicly traded. Sabre, represented in 45 countries, is a leading provider of technology for the travel industry and provides innovative products that enable travel commerce and services, and enhance airline/supplier operations.

4. Worldspan

Founded February 7, 1990, Worldspan was originally owned by affiliates of Delta Air Lines, Inc., Northwest Airlines, and Trans World Airlines, Inc. It is currently owned by affiliates of Delta Air Lines, Inc. (40%), Northwest Airlines (34%), and American Airlines, Inc. (26%). Since its 1995 advance into the world of Internet technology for the travel industry, Worldspan has successfully developed the strategies, solutions, and services to ensure the company's long-term success in the new web-based world of travel distribution. Worldspan provides worldwide electronic distribution of travel information, Internet products and connectivity, and e-commerce capabilities for travel agencies, travel service providers, and corporations. Worldspan currently serves 20,021 travel agencies in nearly 90 countries and territories. Headquartered in Atlanta, Georgia, Worldspan connects approximately 421 airlines, 210 hotel companies, 40 car rental companies, 39 tour and vacation operators, and 44 special travel service suppliers.

Advantage of hotel intermediaries:

Meeting planners and travel agents could become an even more important distribution channel than they already are for hotels, provided that lodging operators understand the - factors that create value for those important intermediaries. As part of Cornell's broad-based survey of best practices in the U.S. lodging industry, researchers conducted a survey to discover the hotel attributes and practices that create value for travel agents and meeting - planners. The study found that the most important factor in the lodging transaction with intermediaries is a hotel's ability to make the hotel booking process as smooth as possible, including a problem-free stay for the clients. While location is, of course, the key factor in the intermediaries' choice of a hotel for their clients, travel agents indicated that the quality of communications, the hotel's brand name or reputation, and the quality of deals or incentives were also important in creating value in the booking transaction. While a good price is important, meeting planners additionally consider meeting and convention services and food- service quality as essential to creating value in a hotel transaction.

Speech Technology to Distribution System

IT in tourism helps to reduce information gaps among suppliers by providing information on market products, and among consumers by reducing the complexity of decision making. Mobile tourist information applications for in-trip information services are developed in different ways. Speech technology offers a similar in-trip information system in the form of a telephony speech dialog systems (SDS), which provides diverse information via a telephone voice interface in a dialog of question and answer. The idea of a destination speech dialog system so far solely exists in theory. The system can be reached by tourists via a (mobile) telephone in the destination where they receive information on sights, accommodation, opening hours, entrance fees, the weather, etc.